IMM

1. 1 Introduction to Materials Management 13

1.1. Introduction 13 / Operating Environment 13 / The Supply Chain Concept 16 / What is Materials

1.2. Management? 21 / Summary 25 / Key Terms 26 / Questions 26 / Problems 27 / Case

1.3. Study 1.1: Priya’s Cakes 27

2. 2 Production Planning System 30

2.1. Introduction 30 / Manufacturing Planning and Control System 31 / Sales and Operations Planning 35 /

2.2. Manufacturing Resource Planning 37 / Enterprise Resource Planning 39 / Making the Production

2.3. Plan 39 / Summary 48 / Key Terms 49 / Questions 49 / Problems 50 / Case Study 2.1:

2.4. Meridian Water Pumps 54 / Case Study 2.2: Williams 3D Printers 55

3. 3 Master Scheduling 57

3.1. Introduction 57 / Relationship to Production Plan 58 / Developing a Master Production

3.2. Schedule 60 / Production Planning, Master Scheduling, and Sales 65 / Summary 71 /

3.3. Key Terms 71 / Questions 71 / Problems 72 / Case Study 3.1: Acme Water Pumps 78 / Case

3.4. Study 3.2: The MasterChip Electronics Company 79 / Case Study 3.3: Macarry’s Bicycle Company 81

4. 4 Material Requirements Planning 84

4.1. Introduction 84 / Bills of Material 86 / Material Requirements Planning Process 93 / Using the

4.2. Material Requirements Plan 104 / Summary 108 / Key Terms 108 / Questions 108 / Problems

4.3. 109 / Case Study 4.1: Apix Polybob Company 120 / Case Study 4.2: Benzie Products Company 122

5. 5 Capacity Management 124

5.1. Introduction 124 / Definition of Capacity 124 / Capacity Planning 125 / Capacity Requirements

5.2. Planning 126 / Capacity Available 128 / Capacity Required (Load) 131 / Scheduling

5.3. Orders 134 / Making the Plan 135 / Summary 137 / Key Terms 137 / Questions 138 /

5.4. Problems 139 / Case Study 5.1: Wescott Products 142

6. 6 Production Activity Control 145

6.1. Introduction 145 / Data Requirements 148 / Order Preparation 149 / Scheduling 150 /

6.2. Load Leveling 155 / Scheduling in a Nonmanufacturing Setting 156 / Scheduling Bottlenecks 156 /

6.3. Theory of Constraints and Drum-Buffer-Rope 158 / Implementation 161 / Control 162 /

6.4. Production Reporting 167 / Product Tracking 168 / Measurement Systems 168 / Summary 168 /

6.5. Key Terms 169 / Questions 169 / Problems 170 / Case Study 6.1: Johnston Products 174 /

6.6. Case Study 6.2: Crofts Printing Company 176 / Case Study 6.3: Melrose Products 177

7. 7 Purchasing 180

7.1. Introduction 180 / Establishing Specifications 183 / Functional Specification Description 185 /

7.2. Selecting Suppliers 187 / Price Determination 190 / Impact of Material Requirements Planning on

7.3. Purchasing 192 / Environmentally Responsible Purchasing 194 / Expansion of Purchasing into Supply

7.4. Chain Management 195 / Some Organizational Implications of Supply Chain Management 197 /

7.5. Party! 199 / Case Study 7.2: The Connery Company 200

7.6. Summary 198 / Key Terms 198 / Questions 198 / Problems 199 / Case Study 7.1: Let’s

8. 8 Forecasting and Demand Management 202

8.1. Introduction 202 / Demand Management 202 / Demand Forecasting 204 / Characteristics of

8.2. Demand 204 / Principles of Forecasting 206 / Collection and Preparation of Data 207 / Forecasting

8.3. Techniques 207 / Some Important Intrinsic Techniques 209 / Seasonality 212 / Tracking the

8.4. Forecast 215 / Summary 222 / Key Terms 222 / Questions 222 / Problems 223 / Case

8.5. Study 8.1: Northcutt Bikes: The Forecasting Problem 229 / Case Study 8.2: Hatcher Gear Company 231

9. 9 Inventory Fundamentals 233

9.1. Introduction 233 / Aggregate Inventory Management 233 / Item Inventory Management 233 /

9.2. Inventory and the Flow of Material 234 / Supply and Demand Patterns 235 / Functions of

9.3. Inventories 235 / Objectives of Inventory Management 237 / Inventory Costs 239 / Financial

9.4. Statements and Inventory 241 / ABC Inventory Control 246 / Summary 249 / Key Terms 249 /

9.5. Questions 250 / Problems 251 / Case Study 9.1: Randy Smith, Inventory Control Manager 254

10. 10 Order Quantities 257

10.1. Introduction 257 / Economic Order Quantity 258 / Variations of the EOQ Model 262 / Quantity

10.2. Discounts 263 / Order Quantities for Families of Product When Costs are Not Known 264 / Period

10.3. Order Quantity 265 / Summary 268 / Key Terms 268 / Questions 268 / Problems 269

11. 11 Independent Demand Ordering Systems 273

11.1. Introduction 273 / Order Point System 273 / Determining Safety Stock 275 / Determining Service

11.2. Levels 281 / Different Forecast And Lead-Time Intervals 283 / Determining When The Order Point Is

11.3. Reached 283 / Periodic Review System 285 / Distribution Inventory 287 / Summary 290 /

11.4. Key Terms 290 / Questions 291 / Problems 292 / Case Study 11.1: Carl’s Computers 298

12. 12 Physical Inventory and Warehouse Management 301

12.1. Introduction 301 / Warehousing Management 301 / Physical Control and Security 307 / Inventory

12.2. Record Accuracy 307 / Consignment Inventory and Vendor-Managed Inventory (VMI) 313 /

12.3. Technology Applications 314 / Summary 315 / Key Terms 315 / Questions 316 /

12.4. Problems 316 / Case Study 12.1: CostMart Warehouse 320

13. 13 Physical Distribution 323

13.1. Introduction 323 / Physical Distribution 326 / Physical Distribution Interfaces 329 /

13.2. Transportation 330 / Legal Types of Carriage 332 / Transportation Cost Elements 333 /

13.3. Warehousing 338 / Packaging 343 / Material Handling 345 / Multi-Warehouse Systems 345 /

13.4. Footwear Limited 351

13.5. Summary 348 / Key Terms 348 / Questions 349 / Problems 350 / Case Study 13.1: ABC

14. 14 Products and Processes 353

14.1. Introduction 353 / Need for New Products 353 / Product Development Principles 354 / Product

14.2. Specification and Design 356 / Process Design 358 / Factors Influencing Process Design 359 /

14.3. Processing Equipment 361 / Process Systems 361 / Process Costing 363 / Selecting the

14.4. Process 364 / Continuous Process Improvement 366 / Summary 376 / Key Terms 377 /

14.5. Questions 377 / Problems 379 / Case Study 14.1: Rory Thomas, Production Manager 382

15. 15 Lean Production 384

15.1. Introduction 384 / Lean Production 384 / Waste 386 / The Lean Production Environment 388 /

15.2. Manufacturing Planning and Control in a Lean Production Environment 395 / Comparing ERP, Kanban,

15.3. and Theory of Constraints 407 / Summary 409 / Key Terms 410 / Questions 410 /

15.4. Problems 411 / Case Study 15.1: Murphy Manufacturing 413

16. 16 Total Quality Management 416

16.1. Introduction 416 / What Is Quality? 416 / Total Quality Management 418 / Quality Cost

16.2. Concepts 422 / Variation as a Way of Life 423 / Process Capability 425 / Process Control 429 /

16.3. Sample Inspection 432 / ISO 9000:2015 434 / ISO 26000:2010 435 / ISO 14001:2015 436 /

16.4. Benchmarking 436 / Six Sigma 437 / Quality Function Deployment 438 / The Relationship of

16.5. Lean Production, TQM, and ERP 440 / Summary 441 / Key Terms 441 / Questions 442 /

16.6. Problems 443 / Case Study 16.1: Accent Oak Furniture Company 444